The World Bank said on Tuesday more people are living in extreme poverty in developing countries than previously thought as it adjusted the recognized yardstick for measuring global poverty to $1.25 a day from $1.
The poverty-fighting institution said there were 1.4 billion people -- a quarter of the developing world -- living in extreme poverty on less than $1.25 a day in 2005 in the world’s 10 to 20 poorest countries. Last year, the World Bank said there were 1 billion people living under the previous $1 a day poverty mark.
The new figures are likely to put fresh pressure on big donor countries to move more aggressively to combat global poverty, and on countries to introduce more-effective policies to help lift the poorest. Even so, the new estimates show how progress has been made in helping the poor over the past 25 years. In 1981, 1.9 billion people were living below the new $1.25 a day poverty line.
The new estimates are based on updated global price data, and the revision to the poverty line shows the cost of living in the developing world is higher than had been thought. The data is based on 675 household surveys in 116 countries. “These new estimates are a major advance in poverty measurements because they are based on far better price data for assuring that the poverty lines are comparable across countries,” said Martin Ravallion, director of the World Bank’s Development Research Group.
While the developing world has more poor people than previously believed, the World Bank’s new chief economist, Justin Lin, said the world was still on target to meet a United Nations goal of halving the number of people in poverty by 2015. However, excluding China from overall calculations, the world fails to meet the UN poverty targets, Lin said.
The World Bank data shows that the number of people living below the $1.25 a day poverty line fell over nearly 25 years to 26% in 2005 from 52% in 1981, a decline on average of about 1% a year, he said. Lin said the new poverty data meant there was no room for complacency and added that rich donor nations need to keep their promises of stepped-up aid to poor countries. “The sobering news that poverty is more pervasive than we thought means we must redouble our efforts, especially in sub-Saharan Africa,” said Lin, a leading Chinese academic.
The new figures come ahead of an updated assessment of progress in meeting the UN’s Millennium Development Goals, which will released late next month at a meeting of the UN General Assembly. While most of the developing world has managed to reduce poverty, the rate in sub-Saharan Africa, the world’s poorest region, has not changed in nearly 25 years, according to data using the new $1.25 a day poverty line. Half of the people in sub-Saharan Africa were living below the poverty line in 2005, the same as in 1981. That means about 380 million people lived under the poverty line in 2005, compared with 200 million in 1981.
CHINA’S POVERTY RATE PLUNGES
Elsewhere, poverty has declined. In East Asia, which includes China, the poverty rate fell to 18% in 2005 from almost 80% in 1981, when it was the poorest region. In China, the number of people in poverty fell to 207 million from 835 million in 1981. In South Asia, the poverty rate fell from 60% to 40% between 1981 and 2005, but that was not enough to bring down the total number of poor in the region, which stood at 600 million in 2005. In India, the number of people below the $1.25 a day poverty line increased to 455 million in 2005 from 420 million people in 1981. But the share of the population in poverty fell to 42% from 60%.
The World Bank noted that better-off countries have higher poverty lines and said it was more appropriate in regions such as Latin America and Eastern Europe to use a $2 a day rate. The bank has estimated that 100 million people could fall into extreme poverty due to soaring food and energy prices. But Ravallion said it will take up to two years before there is clarity on the impact that soaring costs have had on poverty.
However, he said early indications from survey data “are pretty convincing that we’re going to see increases in poverty as a result of food and fuel prices.” (Reuters)